Seoul Apartment Sale Prices Also Fell... Decline Reverses After 1 Year and 8 Months

Apartment Sale Price Index Change Rate by Province / Provided by Korea Real Estate Board.

Seoul apartment sale prices have turned to a downward trend for the first time in 1 year and 8 months. This is due to the impact of the perception of peak housing prices, interest rate hikes, and loan regulations, with 11 out of 25 districts in Seoul showing negative growth rates. The apartment jeonse prices in the metropolitan area, which had stopped rising for about 2 years and 5 months, also shifted to a decline.

The Korea Real Estate Board announced on the 27th that the apartment sale prices in Seoul fell by 0.01% in the fourth week of this month (as of the 24th). This marks a shift from a 0.01% increase last week to a decline this week. The metropolitan area also stopped its upward trend, turning from a 0.01% increase last week to flat this week.

In Seoul, among the 25 autonomous districts, 11 districts declined and 6 districts remained flat. In particular, the Gangbuk area, which has 14 districts, saw a shift to a -0.01% decline this week as listings piled up and transactions were mainly of urgent sales.

Specifically, Gangbuk-gu (-0.03%) saw declines mainly in large complexes in Mia-dong, Nowon-gu (-0.03%) in Sanggye and Junggye-dong, and Dobong-gu (-0.02%) in older buildings in Ssangmun and Banghak-dong, with the decline widening.

The 11 districts in Gangnam turned flat. Seocho-gu (0.01%) rose mainly due to reconstruction in Seocho-dong, and Gangnam-gu (0.01%) increased mainly in some medium to large-sized units, but the growth rate narrowed. Songpa-gu (0.00%) showed mixed trends of rises and falls, turning flat. Dongjak (-0.01%) and Gangdong-gu (-0.01%) shifted to declines, with transactions mainly of urgent sales.

The Real Estate Board explained, "Due to increased market uncertainty amid global monetary tightening concerns, buyer sentiment has been greatly weakened. Combined with additional interest rate hikes and falling jeonse prices, various downward pressures have converged, causing Seoul as a whole to turn to a decline for the first time in about 1 year and 8 months."

Apartment prices in the metropolitan area also approached a decline. In Incheon, 2 out of 8 districts declined and 1 district remained flat, reducing the growth rate from 0.04% last week to 0.02% this week.

In Gyeonggi-do, among 45 cities and districts, 4 including Suji-gu in Yongin shifted to a decline, and 9 including Uiwang-si saw an expanded decline, turning from a 0.01% increase last week to flat this week. This is the first time in about 2 years and 5 months since August 2019.

Ichon-si (0.21%) and Anseong-si (0.12%) rose mainly in mid- to low-priced areas, while other regions generally showed a strong wait-and-see attitude. In particular, Suji-gu in Yongin (-0.03%) shifted to a decline as urgent sales were traded mainly in Pungdeokcheon and Jukjeon-dong. Also, Dongan-gu in Anyang (-0.16%) saw an expanded decline along with falling jeonse prices.

The growth rate slowed compared to 0.02% the previous week. Anseong, which is directly or indirectly influenced by transportation pledges of ruling and opposition presidential candidates, rose 0.23%, and Ichon-si and Paju-si also rose 0.21% and 0.16%, respectively, but overall buying demand decreased, stopping the upward trend. Among 45 cities and districts, 9 including Jangan-gu in Suwon shifted to a decline, 6 including Hanam-si maintained a downward trend, and 3 including Suji-gu in Yongin turned flat.

In the provinces, Daegu and Sejong fell by 0.08% and 0.19%, respectively. Daegu's decline continues due to the accumulation of unsold units, and Sejong's decline persists due to new housing supply. Jeollanam-do also stopped its upward trend and remained flat this week following last week, influenced by new housing supply.

While the jeonse market is also showing stability, apartment jeonse prices in the metropolitan area shifted from flat last week to a 0.02% decline this week. Seoul apartment jeonse prices turned flat, and Gyeonggi and Incheon apartment jeonse prices fell by 0.02% and 0.06%, respectively, this week.

In the provinces, apartment jeonse prices in Sejong (-0.30%), Daejeon (-0.12%), and Daegu (-0.06%) declined. Among 176 cities, counties, and districts, the number of areas with price increases decreased from 110 to 107 compared to last week, while flat areas increased from 22 to 23 and declining areas increased from 44 to 46.